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FDA and CMS take first step to establish parallel review

Three months after FDA and CMS signed a Memorandum of Understanding (MOU 225-10-0010) to formalize communications and data sharing, the agencies jointly published a September 17, 2010, Notice and Request for Comments to establish a process for parallel review of pre-market, FDA-regulated medical products.1 The speed with which this Notice followed the MOU signing suggests the agencies’ mutual interest to establish a parallel review process was the primary driver behind getting the politically-sensitive MOU completed in the first place.

Speeding Consumer Access

The agencies state that the goal of parallel review is to reduce the time between FDA marketing approval or clearance decisions and CMS national coverage decisions in order to speed consumer access to new, reliable, safe and effective medical products. The agencies want to create incentives for increased investment in innovative medical products. The solicitation, which poses more than 20 questions for public comment, recognizes there are several difficult issues that must be addressed before initiating a parallel review process. After considering the public comments, which are due on December 16, 2010, the agencies plan to publish a joint draft guidance describing the parallel review process and to create a pilot program providing for the parallel review of medical devices.

The Notice states that the proposed parallel review process is intended to be voluntary and will occur at the request of a manufacturer with the agreement of both FDA and CMS. CMS would begin its NCD-related review at some point during the FDA’s approval process (we do not expect 510(k) cleared products will be appropriate for parallel review given one of its primary purposes to spur innovation). As part of the review, manufacturers could meet with FDA and CMS together to develop clinical trial protocols designed to meet both agencies’ standards. FDA’s approval decision would occur before CMS releases its coverage determination. This staged approach is necessary, as CMS does not want to cover products before the FDA takes final action. In addition, the CMS coverage process is fully transparent, with a requirement to seek public comment. This is unlike the FDA process, which maintains total privacy of data. Each agency would make decisions based on its respective authority and standards.

Several Concerns

FDA and CMS believe that parallel review could decrease the time it takes for medical products to reach the public by reducing the time between market approval and national coverage determinations. The agencies are clearly focused on the time in between FDA approval and CMS coverage. But what remains unclear is how much additional up-front time it will take, with CMS and FDA input, to design, implement and carry out a more comprehensive clinical trial that intends to collect data relevant to each agency’s standard and mission. Investors, who focus on the time use of money and the time it takes to realize a return on investment, may not be overwhelmed by the time differential between the historic and proposed approach, if indeed there is one. It is also important to note that the parallel review will not include CMS’s payment decision, which is the second step of CMS’s own multi-step process. When investors and manufacturers consider the pros and cons of volunteering for a parallel review, they need to consider the overall timing of getting the medical product approved, covered and paid for. The payment step is a complex one that alone can add considerable time to the “get to market” calculus.

The solicitation is silent on the role of the local coverage determination process in the parallel review context. It appears to presume a national coverage determination, which removes the more flexible local coverage determination process historically favored by industry. This also puts the technology’s market viability at great risk if CMS were to issue a national non-coverage decision. And it would also limit patient access to medical products otherwise approved by the FDA.

Data privacy is also a key factor. For example, under FDA statutes and regulations, the pre-market application itself is considered confidential commercial information prior to approval. Compare this to CMS’s policy and practice, which is to inform the public, and solicit its input, when it begins a national coverage determination process. Simple publication of CMS’s national coverage determination process of an unapproved medical product would alert competitors that a product is at least in the FDA pipeline nearing an agency decision. The agencies request ideas for how to comport CMS’s transparency needs with the manufacturer’s need for confidentiality of proprietary information during and after the FDA review process. The agencies also seek comment on whether FDA and CMS should have access to the same data and information about the product during parallel review.

Other Questions and Challenges

As noted above, the agencies envision the parallel review process as completely voluntary, with the manufacturer requesting parallel review and both agencies consenting to participate in the process. However, the agencies ask the public whether anyone other than the product sponsor, e.g., FDA, CMS or a third party, should be able to initiate a parallel review. Should the agencies be empowered to compel a parallel review, just as CMS can now unilaterally initiate the national coverage determination process? That is not ideal for industry, as a negative or limited national coverage decision can be the death knell for a new technology. Other questions and challenges for industry include the following:

Will data sharing and increased dialogue between the agencies impact each other’s decision-making?

Will CMS’s interest in the impact of new technologies on patient outcomes and comparative effectiveness influence FDA’s review of safety and efficacy?

Will parallel review really be able to achieve its stated goals? That is, reduce time to market, speed consumer access to innovative products and create investment incentives?

While the FDA is eager to access Medicare claims data to help judge product safety and efficacy, will CMS be equally eager to evaluate industry data generated to satisfy FDA’s post-market surveillance requirements to better inform its own coverage and payment decisions?

Medical Device Companies Should Provide Input

A parallel review system will certainly pose both opportunities and challenges for industry. Medical device companies would be well-served, therefore, to participate in the process to ensure their voices are heard. It is essential that they study all of the questions posed in the solicitation notice with care and submit comments on those issues most important to them by the December 16, 2010 deadline.

The authors acknowledge the assistance of Jennifer Nowak, an associate in the firm’s Washington, D.C. office, in the preparation of this alert.

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